Earnings Call: Q1 2021

May 6, 2021

Thank you very much, and I want to welcome all of you to Shop Apotheca's earnings release call. I hope that after the presentation, you will agree with Jasper and me that Shop Aptica had indeed another Strong quarter and we did another step on our growth trajectory. However, before we walk you through the details of our performance in Q1, I'd like to acknowledge the questions that you might have around the announcement by the Gematik last week regarding the rollout of electronic prescriptions in Germany. I'm sure that this will come up during our Q and A session as well. Later in the presentation, we are going to share our thoughts regarding this announcement. Most importantly, however, Shop A Boutique Europe, we will be ready for e prescriptions when they start in start in earnest. Yes, but I think this is the 4th time we're doing this from our new headquarters here in 7 AM And it's actually the 4th time we are doing this via video webcast. Based on some feedback that we have received from you, we're going to handle our the Q and A session a bit differently. This time and unless we hear something different from you, We want to do this also for future webcasts. We're going to switch the questions back to audio. You remember in the past, we did this via chat function. We want to do it again via audio. We want to make sure that we will be able to answer all of the questions that you have, including some follow ups on your side. So when we get to the Q and A session, for those of you who want to ask a question, Please use the dial information that was part of the invitations that you all received. When you ask a question, please turn off the audio of your webcast to avoid an echo. For everybody else, so if you don't want to ask a question, nothing changes, Just stay on the webcast. So we're going to start as usual with the highlights of our performance in the Q1, followed by an update on our strategy, some of the milestones we reached in the Q1. And as you will see, we have considerably shortened and condensed our presentation to ensure that we will have sufficient time for your questions. Well, let's have a look at the Q1. We delivered, we think, another quarter of strong growth. Our top line went up by more than 22% and reached €284,000,000 Furthermore, for the 5th quarter in a row, we delivered a positive adjusted EBITDA margin this quarter of 2.0 percent, which by the way is fully in line with the plans, the internal plans that we have for this year. When you look at our top line performance at 22% growth, I think that can only be fully appreciated if you consider a couple of headwinds that we experienced in the Q1 of this year. Number 1, of course, the Rx bonus ban had a negative impact on our Rx business. Number 2, the absence of a regular Covent cold season related to the social distancing measures and the generally higher hygiene standards negatively impacted both our Rx as well as our OTC portfolios. But to keep this in perspective, the overall if you look at the OTC See market in Germany for the Q1 covering both stationery pharmacies as well as the online pharmacies declined year over year by 17%. We could decouple ourselves from this negative development. Our OTC Tea Business in Germany actually went up a little bit. But again, that's the context in which we operated in the Q1. And last but not least, and I think that's also obvious to all of you, Q1 last year was simply a tough quarter to compare ourselves against. Despite these headwinds, again, we grew by 22% and the growth was purely organic in nature. Our active customer base increased by 36% versus March last year and were over 500,000 active customers versus the end of last year. Jaspal is going to share a little bit more color around the successful placement of our convertible bond earlier this year. But in parallel to driving our top line, we didn't lose sight of executing our strategy. We continued, as I already mentioned, with our preparations for the e prescription launch in Germany, And we strengthened our expertise in the area of digital medication management with the acquisitions of Smart Patient in January and then just a few weeks ago with the acquisition of Med App in the Netherlands. So if we look at the 2 reporting segments on the right hand side, this time we're going to Start with international segment, which went up really significantly by 71% Year over year, the international segment, if you're not yet familiar with it, covers Belgium, France, Italy, and the Netherlands and all of these markets posted very significant year over year growth. In the DAS segment, The 3 countries also all increased and increased nicely. All the product segments increased with One exception, and again, you're familiar with this already, our Rx business in Germany declined 17% year over year. Looking at the Rx development, we need to keep in mind that Q1 last year, of course, included March. And in March last year, Many, many of the chronically ill patients in Germany rushed to their doctors before the first lockdown in order to stock up on their prescription medication. So we had very strong Rx sales in March last year. March was actually one of the very the strongest months, Rx months in the history of Shop Apoteka. Only the month of July was even stronger, and again, this was after the lockdown when patients went back to their doctors to renew their prescriptions. When you look at these two segments, it's notable that the relative Share of the international segment has increased over the last 12 months. A year ago, the international segment accounted for a little bit more than 13% of our overall sales this year in Q1, the international segment actually accounted or is approaching at 20%. So significant growth in these international markets. And I know we don't talk too much about them or haven't talked too much about them in the past, but also going forward for the foreseeable future, we see significant growth potential in these international markets. Our active customer base reached 6,800,000 so close to 7,000,000 By the end of March, our net promoter score actually compared to Q4 last year went up by 1 point from 70 to 71. And you might have heard Jasper and me talk about this in the past. We closely monitor And more importantly, we manage our Net Promoter Score because it's the best measure to assess the overall satisfaction of our customers with the end to end customer journey. And again, you compare this to other retail verticals or if that's disclosed with some of our competitors. I think we can be really proud of the 71 that we achieved in Q1. And of course, We are not standing we don't want to stand still. Our average shopping basket went down by roughly €1.60 60 versus a year ago. This is purely a mix effect because we thought we had the decline in our Rx business. The Rx business has significantly higher average basket values. By the way, when you just look at the non Rx Basket, year over year, we saw a considerable increase from a year ago. And the last remark on this chart on the Bottom right, you see that we continue to add products to our Red Care line of own brand products, which by the way is developing nicely and according to expectations. Switching to our web traffic. The orange line shows the total number of weekly visits to all of Shop Aptica's websites. We see the January jump to above 5,000,000 weekly visits, and we have stayed at this elevated level. By the way, if you look at the left hand side, the Q1 last year, The weekly visits, they are hovering between $3,000,000 $4,000,000 And in the Q1 this year, they increased to 5 to €6,000,000 I also want to talk about the blue bars just briefly. The blue bars indicate our year over year traffic growth versus the exact same quarter the exact same week a year ago. And again, looking at the Q1 this year with the exception of the 1st week of March was a little bit of an anomaly. Throughout the quarter, we saw year over year growth of higher in excess of 40%. By the way, in March, Shop Aperticker's German website was the 4th Most frequently visited healthcare related website in Germany, not a surprise. The number one position was the Robert Koch Institute. And when you compare when you look at the pharmacy websites, Shop Apertique in the month of March was once again clearly in the pole position. Well, before I hand over to Jasper to walk you through the financials of the Q1, a quick look at the evolution of our quarterly Orders and our repeat order share, so you see the increase here of our Q1 orders, they reached $5,100,000 increase compared to a year ago by 23%. So that's pretty much in line with our top line growth. Our repeat order share remains in the 80% range. That's what we're aiming for. We think that is a healthy mix of loyal, returning customers and new customers that we have continued to gain and want to continue to gain going forward. Jesper, I think it's your turn. Yes. Okay. Thank you very much, Stefan. And good morning to everybody on the call today. On this slide, all the key P and L lines as summarized this quarter versus the same quarter last year and this quarter versus last Q4 quarter. Before I go into the details of the numbers you're seeing here, I take one step back And just to remind us of what happened last year. So last year 2020, we had the guidance at the start of the year to break even for the first time on the adjusted EBITDA level, breaking even, so around 0. And in general, expectation based upon the seasonality that you Always see with Shop Aptake there was an expectation of a slightly negative adjusted EBITDA margin in the Q1 of last year. But because of strong internal performance and also of the arrival of COVID, we actually had a very strong quarter last year. We achieved an adjusted Even a margin last year of 2.1%, which was then a positive surprise to the market and to the analysts. And also a little bit later, we actually raised our full year guidance based upon that new normal. So that was last year, a high margin because of Actually an absence of marketing in a couple of weeks of March because we decided to stop marketing because the demand was so high. And also our efficiency was really high where we all on the head office helped getting the orders out to bring the medicines to the people in the start of the COVID period. So that was last year. So if I take this helicopter view, then I'm seeing that we increased sales by 22%. That's an increase of €52,000,000 And this increase despite the headwinds from Rx Bonus Ban and very important, fewer people being ill and fewer people going to the doctor. In this quarter, we actually achieved the same profitability as we did last year. So that's my perspective. And also compared to our internal plans, the 2.0% in the Q1 is entirely online for the more than 2.3% expectation for the current year. So sales increase of 22%. We did this with a very strong increase of gross profit margin. Later I will show the bridge on the next slide. Selling and distribution expenses reflect that we decided to really focused on marketing and acquiring new customers, which we did successfully and also the fact that we operate to facilities because of the capacity. The adjusted added expenses that you see here are good versus last up to 0.4%. But if you look to the right, it's actually slightly better than it was prior quarter 4. All in all, Quarter 1 versus quarter 1 last year, the profit, the adjusted EBITDA in absolute terms is slightly higher, 0.8. The margin is slightly lower minus 0.1%. And my last remark here is if you look at the fully loaded straightforward P and L EBITDA that's at the bottom. You see a slight increase of the adjustments that we had this quarter, but that's reflective of the fact that We had increased cost of our ESOP program, but also because we had one off non operational costs related to our 2 acquisitions and the issuance of a new convertible note. So all in all, 2.0 on track of our guidance, we made investments in growth and we achieved a better gross profit margin. Please the next slide. Here's then a bridge of the increase of 4.1%. So I start at the left. Last year already significantly above 20% for the first time, but we increased this year again on top of the sourcing improvements in 2019 2020 this quarter, again, a 0.3% improved conditions on everything that we source. And then you see a 1.4 percentage point, which you have also seen a significant increase the past 3 consecutive quarters, which we named net pricing and product mix. So the total portfolio of prices, vouchers, price reductions and products that we offer to the customers had an additional contribution margin of 1.4 percentage points. So this together a solid 1.7%. And if we then Look at the country and our rich OTC mix, that to me is more a mathematical impacts from the fact that our REIT sales are down, so not yet relevant. And in other, there is and positive impact from the fact that SmartPatient is having gross profit on their B2B business this quarter. So that's the gross profit. If we then go to the next slide, please, the selling and distribution expenses. Actually, these went up significantly compared to the prior For the last year, marketing because we focused on what we're strong at doing successful marketing. We saw the NPS. We saw the inflow of new customers. We saw the impressive sales growth offsetting the impact of our mix. And we also compare this to a very low marketing number that we had last So year over year increase of 2.7 percentage points. Shipping, packaging entirely due to the fact that international is growing faster because premix actually there is no increase in the operational labor that's our deliberate choice to at this moment we decided that last summer to operate 2 facilities at the same time, everything from international is coming from the building I'm presenting from the new facility, but at the same time everything from DACH is coming from the old facility. So we accept for 6 to 9 month So inefficiency because we prioritize stability and capacity to grow. We expect In the end of the current year that we will have all orders coming from 1 facility, an automated facility. So that's the story of S and D. Next one please, what does it mean for our cash? We started the year and we started the quarter with 128,000,000 of cash, which includes short term financial assets. And we ended the quarter €312,000,000 €230,000,000 higher at €41,000,000 of cash. I start at the left. Positive info from our operations of €5,000,000 basically reflecting the positive adjusted EBITDA. But in addition to that, good performance of favorable working capital movements. On one hand, in quarter 1, we generally always see a favorable working capital because we start with the high year end balances. But apart from that you also see that on a structural base we improved and our receivables and our payables position. 5 plus €25,000,000 is an inflow of €30,000,000 in the 1st quarters. Then we have our investments. That's not only our regular investments in It's also in our distribution center and it is including the cash out of the 2 acquisitions of Medab and smart patients. Financing, to make a long story clear, basically we could Say this increase that you're seeing here is the result of the successful placement of our new convertible bonds. And only convertible bonds. Please remind that we had a convertible bonds where we paid a coupon and interest of 4.5%. But in a win win situation with the large investors and our convertible bonds, we earlier redeemed this bond past October, November 2020. So that Bolt did not exist anymore and we placed a successful Bolt at the start of this year where we paid a coupon of 0. But those modeling based upon the P and L, please note that because of IFRS rules, The accounting of a convertible bond is split in the value of a call option and the presumed bolt coupon. So you will see in our P and L still interest expenses related to this bond, but that's offsetting the cash flow because we don't make interest. It's a 0 in the cash flow. So that's all another picture. One concluding remark looking at this picture, I think we are in a real robust situation. And with that, Stefan, back to you. Okay? Thank you. So let's shift gears for a quick and concise update on some of our strategy topics. You have heard of Shop Aperticker's ambition to evolve from predominantly being an online retailer to becoming Europe's leading customer centric e pharmacy platform. We have, of course, built our strategy around this ambition. And in the Q1, We actually reached a couple we achieved a couple of milestones tied to this strategy. Shop A Boutique has an active presence today in 7 European countries. We are, of course, solidly positioned in Germany, we have market leading positions in Austria and Belgium. And in the other four markets, we see significant growth potential going forward. The basis for our the growth of our customer base is, of course, the overall satisfaction with Shop Aperticker's offering reflected in our end to end customer journey, which is measured, as I mentioned a moment ago, with our Net Promoter Score of 71. We talked about the strategic milestones that we hit in the Q1, of course, and you've heard about this before, We strengthened our capabilities, but also our capacity in the area of digital medication management With the acquisitions of Smart Patient in Germany and MetApp in the Netherlands, We remain convinced that sophisticated digital medication management will be a key driver, especially in an ERX world. Moreover, of course, the acquisition of Meta was the first step of ShopAboteka, the first Rx step beyond the boundaries of Germany. In terms of our the transition to our new logistics center, everything is on track and remains on track. In January, we started the automation of our equipment of our new equipment and of our processes. And we are about to commence the transfer of customer orders from customers in the DACH region from the old to the new facility. I hope you agree with us that our Strategy remains on track. Just a couple of words about the acquisition of Med App in the Netherlands and to be precise in the city of Eindhoven. The addition of Meta fits in 3 ways to Shop Apoteka. Number 1, we strengthened our expertise in digital medication management. Number 2, We continue our expansion into promising European markets. And number 3, with the Netherlands, we entered the 2nd Rx market And actually, it's the 1st ERX market for Shop Apotaker. So Let me say a couple of words about our path towards e prescriptions, starting with the announcement from the Gematik last week, which from our vantage point was reassuring in a couple of ways. Number 1, the Gematik confirmed that it will start up the telematics infrastructure in July as it had promised. Number 2, it confirmed its readiness for the ERX mandate And that's when e prescriptions are going to start in earnest on the 1st January next year and principally confirm that the mandate will indeed stay in place. And in terms of the decision to start with a test region in the Berlin Brandenburg area, we actually think that was a smart move because based on the experience that all the market participants are going to Again, we're going to end up with a better overall user experience and that can only help with the adoption and the use of electronic prescriptions when once again E prescriptions are going to start in January next year. We're going to, in all likelihood, the process, the systems, The potential errors will have been found during this pilot phase. And again, with Gematik will be off will be able to offer a better overall customer experience. Based on everything that we have seen so far, we really we have no doubt that Gemartic, they have hit all of the milestones of their admittedly tight and ambitious ERX roadmap. And based on everything we know today, we have no reason to doubt that this will hold true for the remaining steps as well. We at Shop Apoteka, we, of course, with our Rx task force, which has been in place literally since 2019, We will be ready whenever a customer, also a customer in the test region decides to send a prescription our way, we'll be able to receive it and we will be able to process it and to dispense medication. Before I on the next chart, before I Hand over again to Jasper. Just a couple of words about some changes on our supervisory board, Jan Taylor, we've been at the helm of our Supervisory Board since the IPO. For purely personal reasons, he decided not to go for another term. Jan has really been instrumental not just with the IPO itself, but he also helped us and the management team to avoid some of the potential post IPO pitfalls of fast growing companies. So Jan, thank you very much for your leadership and we're very Happy that you will stay involved with Shop Aptake as one of our major shareholders. Bjorn Suller, who has been On the supervisory board since the IPO, he's going to take over as the chairperson of the supervisory board. Bjorn is going to ensure continuity on the supervisory board and we are looking forward to working with in his new capacity. And Last but not least, we are also happy to welcome Henriette, Henriette Poyko to the Supervisory Board. Henriette has a wealth of experience in media relations, in public affairs and investment banking. And we are really excited to benefit from all the insights that she is going to bring to the table. So Henriette, a warm welcome from all of us. And again, we're looking forward to working closely with you in the future. And with this, I'll hand it over to Jasper again. Yes, super. Yes, with pleasure. Yes, here it's the guidance that we have and actually in the from a relative perspective, turbulent times on the capital markets, on the ERX market on the healthcare and COVID related impact markets, we did not only delivered according to me a very solid or perhaps even a very strong quarter one results, but we also feel comfortable enough that we could actually reiterate today our guidance for 2021 and for the longer term in all aspects. So that means for the current year 2021, we expect to continue to grow around 20% on a full year basis. The full year adjusted EBITDA grew versus last year 2.2% to between 2.3% and 2.8%. And just to remind this, around 20%, just if I go back to the sales, we have always stated in our guidance that we did not expect a significant increased from ERX already at the start of ERX. We always said this around 20% is not including a significant pickup in year rates in 2021 because the more important date is when it's nationwide and the ambition there is the 1st of 2022 as you all will know. So sales around 20%, adjusted EBITDA between 2.3% and 2.8%. And we expect to make investments, Of course, excluding the CapEx that we did spend on the acquisitions of MedHub and SmartPatients in quarter 1, but on other investments around 3.5% of sales. And our longer term target profitability, our business model for the future is unchanged of an EBIT margin in excess of 6%. So confirmation that our expectation at this moment is that we expect to continue to grow fast in this year and that we think we are in an end to end situation where we combined the significant investments in growth and even a slight uptick in our margins at the same time. I would propose to go this is the next slide and another one please to the Q and A. I was asked to ask you, Please, if you ask questions, mute your webcast. Otherwise, they will interfere with each other. So Emma, please let us know if there's any question. Certainly. We will now take our first question from Alexander Till from Jefferies. Please go ahead. Your line is open. Hi, good morning, Stefan and Jasper. Three questions for me, please. Thank you very much for making the Q and A open line again. Really appreciate it. I will leave the margin discussions to the others. My first question would be on your underlying customer structure. Do you see a change in the customer acquisition costs and quality of customers as we can see a trend in the conversion rate From previously stable at around 9% to 7% in the Q1. My second question is related to your current trading. Could you share some insights how the current OTC and Rx movement is evolving? And additionally, I know you don't disclose on the country level anymore, But could you give us more color on how the countries would evolve in the DACH region to get a better understanding of the underlying OTC momentum in Germany And my last one would be on the noise in the market. I mean, we kind of expected some noise in the press around the rollout, But I also had a lot of factually wrong points being pushed. I mean, one of them points being pushed is definitely related to your customer journey, and I want to address this Directly, I mean, we heard some noise that you might not be able to proceed a printed QR code in your app. What's your take on that? Thank you very much. Should I start? Yes. Go ahead. Yes. Okay. Thanks a lot, Alexander. I appreciate a lot your questions. I'm not aware, we are not aware of any change in the behavior of our underlying customers. We are actually happy with the inflow of new customers in quarter 1 was very positive. What we are seeing is that our existing customers actually did spend somewhat less in the Q1, but we know that Okay. Let me see. Can you still hear me, Alexander? Yes, I can hear you. Yes. You can hear me. Then I just continue. There's something happening with the webcast. I hope that people can still hear us. Now the existing customers were of course impacted by the absence of no fruit and cold, but also by unfortunately fewer people going to the doctor. But we were able to offset that with successes in each of our countries, the inflow of new customers. So no change there in cohort behavior that we are aware of and also no change in conversion there, of course, apart from the conversion that we see in ARIX specifically. Current Trading, yeah. I also would like just to stick to our guidance of growing full year 20%. But I will nevertheless share a bit more color. It's wishful thinking that our Rx will increase significantly in the Q2. The start of quarter 2 was comparable to the end of quarter 1, that's what we see in our mix. But we remain confident that we in our balanced portfolio are able to deliver on the full year guidance of growing around 20%. With a question on DACH and the countries, I take that one and then you know, yeah, okay. Yes, in DACH, in countries, indeed, I don't want to be too formal there, but I want to stick to certain rules that we have. We report in 2 segments, that's DACH and international. And we have achieved double digit growth in each individual country too. So that's some color over there. But discussing more to specific countries, that's not the language that we are talking. What you can see for the numbers and that's perhaps what you are looking for, it's mathematically of course the case. If our Rx is lower by 17%, But our total DACH is increasing by 15%. Still that means that everything but Rx in the 3 countries in DACH have been very successful growing. I hope that's helping you somewhat, Alex. Otherwise, let me know after Stefan addresses your work. Question on noise in the market. Okay. Yes. Yes. Good. Thank you. Yes, but so noise in the market, there's always been a lot of noise in the market because until it's happened, there is a certain degree of uncertainty. But let's look at the facts. We just received a confirmation based on some of the noise that, of course, We also picked up on that we will be able to receive electronic prescriptions from the Berlin Brandenburg test region if a customer chooses to send an electronic prescription to us. So again, that will allow us to test This is in our systems. As an online pharmacy, we will be able to participate in this test region as well. In terms of and I think that was at the core of your question, Alexander, how will we receive the electronic prescription or how will we access the electronic prescriptions? Well, I can only refer to a public document that is available to all of us and these are the ERX specifications as published by the Gematik. And the Gematik talks about 2 primary ways of transmitting the QR code. Number 1, through the Gematik, the central ERX app from the Gematik. And secondly, and that's explicitly written in the specifications, There it says that in addition, a transmission of the QR code via messenger services is permissible as well. We are all waiting, of course, for the directive from the health ministry. All I can say is based on all the context that we have, we don't foresee that there will be any significant change from what the Gemartik published. But again, we are waiting for the final directive from the Health Ministry. Did we answer your question? Okay. Thank you very much. I think that yes, I think that basically confirms what I've also From my connections I had before. And also as a data point for you, I think the management of Combo Group responsible for the part of the doctor connection all of us, I mean, they just Confirmed on their earnings call that they also see no risk for the rollout and basically confirmed this January 1, 2022. So thank you very much. I will jump back into the queue. Thank you. Thanks, Alex. We had the confirmation from the Compu Group a little bit earlier for our context. They said, well, the 1st October that was initially the requirement, that will be really tough, but they will be ready by the 1st January with their practice software. Thank you. We will now take our next question from Volker Bock from Baader Bank. Please go ahead. Your line is open. Hello, gentlemen. It's Perko Boste, Baaderwein. Yes, congratulations on the great Top line momentum you showed in the Q1. I would like to ask 3 questions. And first of all, I would start with the same day delivery progress. How many pharmacists signed up as a partner to your platform? And could you give an update on same day delivery? And second question is on the international business. I know you don't break it down, but however, could you perhaps provide some Highlights, lowlights in regards to product categories or countries to get a bit more granularity in the Bold block of international. And last but not least, the third one, yes, I also want to come back to the Centrelink Question in regards to mandatory introduction of the e script and if that is going to happen or not. I hear the noise. Yes. On the one hand, there is noise about technical issues. I mean, it's hard to decide from outside if it's right or wrong, But I hear you and I hear the confirmation of Gematrix. But however, there's also some noise about that the Solution which is now found for introducing the e script is potentially or perhaps not consumer centric enough. It was Arise by Klaus Eras, the President of the Bundeshehrstekamer. Would you agree on that as well? On all what you have seen, How the process will be managed finally? How do you look at the consumer centric way of the introduction? Because at the end, the consumer has That's the East Chip and has to see the East Chip as a convenient tool in order to drive the penetration going forward. Thank you. Well, I'll start, Jesper, and then you'll chime in. On the same day, We talked about this in the past. We will cover all of the metropolitan areas in Germany by the end of this year. Perhaps it's going to happen actually a little bit faster. But again, our objective, the overall objective is to cover all the metro areas in Germany by the end of this year. Our concept is to work with a limited number of partner pharmacies in those metro areas because it needs to be economically viable for these partners as well. If you have a large number of partner pharmacies that will make it difficult for them to see a financial return on the activities. We are identifying, in some cases, potential partners are approaching us. We are selecting a couple of partner pharmacies in each metro areas. In terms of The third question and the second question, Yaspara, perhaps you want to say something about, again, going back to electronic prescriptions. Again, we are literally in daily contacts with our ERX or Rx First task force with a variety of players of market participants. We have good and solid working level contacts also with the Gematik. In terms of the technical aspects, we don't foresee any major problems based on everything that we know today. So in terms of the consumer, as you described it, centricity, I think that the head of the German Physician Association, he was more referring to how convenient is this for physicians. And there is one question that remains to be addressed and that's how they can digitally authorize or sign electronic prescriptions. Right now, they literally have to lock in and have to electronically sign every prescription individually. And when I assume you have listened to the interview with the head of the Gimatic, Markus Like Egan just a couple of days ago, he clearly stated that the so called COMFOR SIGNATURE which would allow physicians to kind of a batch process to authorize a large number of electronic prescriptions at once. That is clearly on the agenda for the Gematik. And like Deacon, he clearly stated that they know in order to ensure acceptance from the physicians of electronic prescriptions, that's something that needs to be available with the ERX mandate on the 1st January next year. Jesper? Yes. International segment. Yes. Hi. Good morning, Volker. Hi. And just add one last sentence to what you said on the intro of eScripter7 because Volker you also said that potentially it would not be customer centric enough this solution. But if there's one thing that the game market is always focused on is that this should improve the lives of all Germans, of all customers there. And the basic journey is you can indeed receive it digitally through the Kymatic app. But you can also receive it on paper with a QR code on it and you can just use that QR code. That's on the paper. So I think the central point here is actually that it is customer centric and improvement over there. And then to your international, thanks a lot for your questions because we don't get a lot of questions on international. But now that the numbers get bigger and the growth, I also understand that we get more questions there. Product categories and things like that, that's not the level we disclose, Falkirk. We know we don't have Rx except for the fact that actually a couple of weeks ago we started with Rx in the Netherlands, but that's just a start. So it's everything but Rx. Apart from that, it's a comparable portfolio that we also have in the DACH region. And what's very interesting from our perspective is that We see how different the approaches that we need to apply per country. Belgium and Italy and France are very different in this perspective already. What the pharmacy is? What can you sell in a drugstore? What are you not allowed to sell in the drugstore? What can you sell in the pharmacy? And what kind of marketing can you do? You can basically see here that we basically have the same portfolio across all the countries of our products. But the proposition we have to our customers, the devil is really in a detail there to be successful. Volker, that's what's said. It's from our side. Okay. Otherwise, we go to the next one. Yes. Yes, perfect. Thank you very much and all the best. Thanks a lot. Thank you. Thank you. We will now take our next question from Oliver Cowell from Kepler Cheuvreux. Please go ahead. Your line is open. Yes. Thanks. Good morning, Stefanie. I also appreciate the move with audio and video, Probably the best of both worlds. I would take my questions 1 by 1, if that's okay. I have the first one is again on the script. I just wanted to confirm a bit with you and your own considering what we are hearing on the side of stock. Do you see any risk that there could be a further delay to the introduction of Or not? That would be the first one. Well, Olivier, I tell it has happened. There's always some risk. We don't foresee this. Again, based on everything we are hearing, the health ministry and there was a statement from the health ministry, But also to keep market, they confirm they stand by the ERX mandate as of the 1st January. We're going to have elections this Here again, there remains some uncertainty. I don't want to hide this, but that's not what we are hearing from the decision makers. Okay. Fair enough. And then I was just wondering on the customer numbers, if you could Can you shed some lights on how many customers you had in the quarter, please? Not the active customers, but just the customers that were new in the quarter? Yes, indeed the increase of the active customers is indeed net of new customers and churn of customers. So you're asking what's the gross amount. Yeah, that's not how we look at it, but it's nothing spectacular difference from all the other quarters. We can only grow our active customer base as fast as we're doing if we're able to be very sticky to our existing customers and add new ones. So the fact that we were able to increase more than 500,000 of customers in just the 1st 3 months in all the challenging environment as we discussed extensively now is a very good sign also of the fact that we were able to keep many of our existing customers. But of course, internally, we look at that Olivier, but There's nothing to hide, but it's not the language that we talk externally to split that out. For us, it's important to increase the base of loyal active customers and to make those customers really happy. And on the base of that active loyal customer base, We try to add as many new customers and to make them as sticky as possible. And perhaps just one additional thought there. When we look at the behavior of our pre COVID cohorts and the COVID cohorts, we don't see any difference. So in terms of the stickiness that you were referring to, really we don't see a change in the behavior, in the churn, in the activation quota of the customers that we have gained since the start of the corona pandemic. And also last year, somewhere when all the terraces The German cities were full again, but it was a temporary opening up. We did not see that there was any change of new customers being not that sticky, no, on the contrary, I would say, yes. Okay. And fair enough. And can you shed some light on the international versus DACH customer development perhaps? In each country, we had significant growth. We were successful adding new customers and increasing our active customer base with the exception of our itch in Germany. And it's not like one country contributed much more than another country. It's really we were happy with the overall performance in everything with Rx and Germany. So all the countries added new customers. Okay, fair enough. And I want to go back to Slide 1011, On the sequential development of the gross profit margin and the selling and distribution costs, Just wondering on the gross profit first, if you can help us think in terms of the quarter on quarter change in the gross margin. It's pretty good that the Rx bonus plan has a positive gross margin effect and a positive mix effect since you have lower sales in Rx In terms of the share in the mix, anything else to flag quarter on quarter? And I was also curious just to See how Smart Patient contributed to the gross margin development quarter on quarter? Yes. I think it adds insights. If I tell you there is not an EBITDA positive impact from the bonus spend. That's not there. And mathematically, our gross profit margin on the products is higher if you don't give a bonus. But we also gave an opportunity to our customers that because we were not allowed to give the bonus to them that they could choose that we would give it to a charity and it's a charity named Care. At the same time, you see that our marketing on our HP continues. So bottom line, there is not a positive impact in the quarter because of having no bonus to our picks. That's not the case. If we would have continued with growing our picks that actually in euros our bottom line would have been better. Yeah, that's basically. So I think that's the key message there. Then with smart patients, I can't disclose anything on that. But In a total pitch according to me, it's not very relevant. The main reason why we now have incorporated and worked together intensely with smart patients is their expertise on improving digital medication management for our customers and in making the users of their app our customers. But apart from that, they already had their own business. And the business was developing medicine specific apps for the pharmacy industry and they get paid for that. And that's what you see the gross margin. So we have some sales from SmartPatients. We have some contribution margin there, but that's what just because we disclosed so much in the bridge that it wasn't over there. It was indeed it was helping our contribution margin over there. But the main impact for Smart Patient is going to be in the retail sales and in the retail gross margin. So that's the overall picture. And it was in this order of 1.1, it was a major part. In the gross margin isolated, the smart patient impact was a major part. Yes. Okay. Okay, fair enough. And then Slide 11, Kind of the same question. Last year, you stopped marketing for about a month in Q1. This year, definitely was not the case. What about quarter on quarter Q4 'twenty to Q4 to Q1 'twenty one? What happened there? Generally, if you look at Shop Aptake, you see that in quarter 1, our marketing as a percent of Sales is higher than in the Q4. It's generally a quarter where we focus a lot also because of seasonality and customer behavior on acquiring new This was this year also the case. We will also continue probably with in the balance within our guidance to focus as much on growth as possible. And in quarter 4, you actually saw that our sales growth was much more, which was making our and there was not the negative impact of our mix, which is also making the percentage of quarter 4 looking better compared to quarter 1. There was nothing happening. It was actually no, we did what we are really good at. We did focus a lot on marketing in quarter 1 and we are continuing to do that. Okay. And then the last one I was just wondering. And last year, we had a couple of weeks without marketing, not an entire month. Yes. Olivier, because they are all waiting, can you limit your Your very best question. Yes, the last one is yes, the very last question on Rx In Q2, do you expect a continuation of the trend that we've seen in Q1 or something more towards the low single digits? Okay. It's too early, but we see a continuation of what we have seen in the Q1. But again, we stated there is a negative impact from the Rx Bonus ban, which different topic. We remain convinced it's a violation of European law, but yes, it has an impact on our Rx business. Yes, I'll leave it at this. Okay. Thanks a lot. Have a good day. Thank you. We will now take our next question from Alvaro Rau from Barclays, please go ahead. Your line is open. Hi. Thanks for taking my questions. I've got 3. And hopefully, I'm not beating a dead horse, but you talked about 2 ways of transmitting the QR code for e scripts. And regarding the central The script app in particular, based on your conversations with those close to the matter, do you have clarity on whether and how third party apps will be able connect to the Gematik app directly? And I mean, I realize it's not totally clear yet, but is there a date by which this should become Quite clear. 2nd, do you have a sense of what proportion of doctors, practices and physical pharmacies already have the technology needed To actually implement e scripts? And how comfortable how can we get comfortable that they'll be ready for the 2022 deadline? And then lastly, a bit of a boring question. What kind of net finance costs do you expect for the full year, Both cash and non cash? Stefan, I'll take the boring one then and Judith The key of the financing cost of quarter 1, Alvera, is that there's nothing peculiar in quarter 1. So I don't know if you can extrapolate it 1 on 1, but it is just what it is. And what's included in it, it's financing, But it's what I just said, the accounting treatment also of our convertible homes that you're seeing there, which is non cash, but which is in our P and L. That's one part of the financing expenses. Then there is the fact that we because of our cash balances, we pay a negative interest that's in it. But also our operating leases of the head It was a particular year of our facility here and the operating leases you account for in depreciation and in interest expenses as well. So that's those are main elements that are in debt financing. If I think about it, I think it will be comparable in the coming quarters to what you saw in Okay. Alveara, in terms of the connection to the Gematik app, there was a statement from the Gematik in the asked that so called value add apps, they will be able to connect. At this point of time, it It was supposed to happen in relatively short order, but we don't have a firm date there yet. More important For us, it's again when 90% of initially 90% of the prescription of the electronic prescriptions, Once the physician has uploaded the prescription to the telematics infrastructure, meaning the cloud, the physician will print out A copy of this electronic prescription and the most important piece of information on this printout will be the QR code. And for we think the major way to transmit The QR code to a pharmacy or physical choice will be either via Messenger apps or also via, for example, the apps of the various service providers, including Shop A Boutique. Again, we are all waiting for further Clarity, a definitive clarity with the directive from the health ministry, but that's our understanding right now. In terms of readiness, again, there are 2 major players. Of course, we have the, the pharmacists. I don't foresee any, Any issue that they are not going to be ready well in advance of the ERX mandate coming into effect in terms of the physicians, Again, that was a reassuring statement that we heard from Alexander. We had heard it, as I mentioned some time ago already, The largest provider of physician software will be ready for the 1st January This year, we don't there is a software component. Again, that is the physician software. Again, We get more and more confident. Probably some small providers might not be ready, but the vast majority of physicians should be covered. There is a hardware component, the connectors that based on what we have heard so far, that should not be an issue. So again, on a critical path is more the software component, but it looks promising. Thank you. Thank you. We will now take our next question from Gerhard Argunes from Berenberg. Please go ahead. Your line is open. Good morning. Also two questions in respect to the ERX, Please, first of all, do you have an expectation when the directive from the Health Ministry should come? Well, again, it is our understanding that this directive would have to be notified to the European Commission. It's supposed to come into effect on the 1st October, again, based on everything that we've heard so far. So really, in order to be able to notify the European Commission. It should come within a very short period of time. We don't have a firm date. As you know, that was supposed to come much, much earlier, but now they're really under the gun because they need to adhere to the notification period. Okay. And if I hear you correctly, what you expect in the first That is that the vast majority of e prescriptions will be printed into a PDF, there's a QR code. And then I would guess that In your app, you would have a scan function where you could scan this QR code and that's how people would send it to you? Again, I want to leave it a little bit open. There will be alternative means according to the Gematik specifications of transmitting this beyond the central Gematik app. Yes. I'm just wondering, I guess, the rumors are about the Gimatic app itself being an app that you don't need anything else. So In real life, how would it look like on my mobile phone to have Bigmatic app and the Shop Aperticker app any way to transfer the QR code between the 2? Or does it have to come out In a print and then go back into ShopUp Takeers. Any news maybe about the restriction of you being allowed to scan it in because there could be fraud? I mean, anybody could Scanning a QR code. So I think that's the main Yes, everybody could scan in the QR code, but the prescription can only be mailed to the person that's indicated that's included in the electronic prescription. You might have seen what the print is going to look like similar to the paper prescription today. Of course, there's the name, there's the address. We As the service provider, as the pharmacy, it doesn't matter who sends the QR code to us because you have some patients that might not be able to handle the smartphone, the QR code via the smartphone, so a relative might do it for them. But we can only mail the prescription to the individual that's included in the electronic prescription. Again, the assessment that initially 90% or more of the prescriptions will be printed out well meaning that the patient will initially not access these prescriptions through the Gemartic app. That is something that is an estimate that came actually from the Genoptix. Okay. Thank you. Thank you. Okay. I think that's it. So thank you very much for your For your interest in Shop Aperticker, again, hopefully, you agree with Jasper and with me, we had a strong quarter. This is a very interesting and exciting time for all of us because something that has been in the making in Germany literally for almost 20 years is coming to fruition within the foreseeable future. We're very excited about this. We will be ready for electronic prescriptions. And again, we don't want to lose sight of this. This will be an important growth driver for Shop Apertique, but there is much more to Shop Apertique being a customer centric e pharmacy. And again, We've seen some interesting exciting developments outside of ARIX and outside of Germany in the last quarter. And I'm sure we'll be able to share more exciting news with you at our next call. And I think that's in early August, yes, but Yes, absolutely. Yes, after summer. Yes. Thanks, everybody. And you know how to find us if you have more questions. Yes. Thanks, Rodos. Okay. Bye bye.